Op-Ed: Google can leverage municipalities to bring fiber to the masses

One small ISP in Kansas thinks city-funded fiber would give consumers choice.

Joshua Montgomery is the owner and operator of Wicked Broadband, a Lawrence, Kansas-based ISP. He protested a recent legislative proposal in Kansas that was supported by the cable lobby and which would have made it nearly impossible for cities and towns in that state to offer broadband service to residents.

Lawrence, KS—My wife and I run a small ISP here in Lawrence. Customers who live near our fiber are already getting gigabit service and, in partnership with our city government, we are looking at installing a common carriage gigabit system in residential neighborhoods throughout Lawrence.

Most of the rest of the country isn’t that lucky. A vast majority of US households have no ultra-high-speed providers (defined as ISPs that can deliver 1 gigabit per second), and even traditional broadband choices (which usually end up being less than 10 megabits per second) are limited to the incumbent phone or cable provider.

But Google is changing that in Kansas City, KS; Austin, TX; and Provo, UT. By building fiber networks in these communities, Google is forcing incumbent carriers to innovate. They are giving customers choices.

Things aren’t perfect, however. What we're finding is that even mighty Google’s capabilities are limited. Each of these projects is taking years to complete, and expansion is a slow and tortured process. Even if Google wanted to sink all of its cash into fiber systems, the sheer scale of the project would make it impossible for the company to build networks in a timely fashion. It would take too long to spin up the internal infrastructure; work out agreements with all of the myriad players; and design, fund, and construct a nationwide system.

It is clear to me that if it is Google’s goal to improve Internet service in the United States, the company needs to take a different approach. Call it “Google Speed” for building out Fiber systems. Google needs to franchise its technology and marketing to municipalities.

By franchising its operation to municipalities, Google can use its three most important assets to grow its network: branding, engineering, and marketing. Municipalities can then use their strongest abilities—managing infrastructure construction and providing long-term finance—to make the projects successful.

Municipalities all over the country (135 at last count) are looking at building high-speed fiber systems for themselves. Chatanooga, TN; Layfayette, LA; and Bristol, VA already have systems in place, and cities like Longmont, CO are in the process of constructing them.

Further Reading

Lobbyist for Comcast, Cox, TWC wrote bill to stifle rivals like Google Fiber.

Municipalities are excellent at constructing infrastructure. They do it all the time in the form of roads, parks, libraries, and even highly complex water systems.

Unfortunately, not all municipalities are forward-thinking when it comes to Internet infrastructure. Most municipalities are risk-adverse, ultra-conservative institutions. They are also extremely wary of taking on powerful cable and telephone monopolies. In many of the projects listed above, the municipality was sued repeatedly to keep it out of the telecommunications market.

Google can quell municipal fears by providing turnkey engineering standards and using its legal muscle to keep incumbent companies in line. Cities would be able to use the engineering standards in their Request For Proposal (RFP) process to ensure that the resulting network is worthy of Google’s brand. Once built, Google would use its brand cachet and marketing muscle to ensure that the systems reached the level of subscription necessary to make them financially successful.

In Provo this already happened, though accidentally. Provo built the fiber network, then gave it to Google as a gift when the city proved incompetent at marketing and managing the system. Google likely made some improvements, but ultimately it is making use of the existing fiber to provide its ultra-high-speed service.

I wouldn’t propose that municipalities build these networks at taxpayer expense just to give them away, but they could certainly provide “common carriage” access to Google.

Here in Lawrence we are building a common carriage system that includes four fibers to each home. Under a franchise model, Google would provide engineering expertise and online marketing in exchange for the use of one fiber. The rest of the fibers would be available for use by other carriers on an equal basis, at a low fixed cost.

The end result would be municipally owned and financed networks where one service is managed and marketed by Google. The additional capacity installed during construction would be made available to all comers on an equal basis, ensuring Google’s good behavior in the future.

Everyone wins in this scenario. Google gets explosive growth by leveraging its core capabilities. Municipalities get access to the technology and marketing they need to build successful networks. Citizens get choices. Finally, incumbent carriers get access to cutting edge fiber infrastructure without having to pay for it themselves. If the incumbent carriers are smart enough to figure this out they will also win by externalizing their capital costs. If they realize it quickly enough, they will even preserve most of their market share.

I’ve been telling our city commission that the best way to bring Google to Lawrence is to build the network ourselves, then invite Google to use one fiber. Not only do I think it might work here, I think it might work everywhere.

94 Reader Comments

I wouldn’t propose that municipalities build these networks at taxpayer expense just to give them away, but they could certainly provide “common carriage” access to Google.

You'll have to forgive the silly question, I think my reading comprehension is a little off. In your proposed model, who, exactly, is paying for the networks to be built?

Quote:

Here in Lawrence we are building a common carriage system that includes four fibers to each home. Under a franchise model, Google would provide engineering expertise and online marketing in exchange for the use of one fiber. The rest of the fibers would be available for use by other carriers on an equal basis, at a low fixed cost.

That sounds awesome. Is your company paying for it to be built? I love the idea of "common carriage", as you described here. My only fear would be Google surreptitiously monitoring the lines, regardless of whether I'm using their service or not. I would personally be willing to pay a small premium to keep Google away from my data, but suspect I'm in the minority there.

I'm still not understanding who is funding the initial common carrier built out. It looks like taxpayers are funding it, with the promise of free service via Google? Under that model, wouldn't it be double charging the taxpayers who paid to install the system if they opt for a service other than one provided by Google?

As a resident in Longmont, I can get behind this. I think that if good guidelines had been available our process could have been faster, it seems like the last two years a lot of our slowdown has been because the people responsible aren't really sure how to go about it, and don't have a solid business plan. Though in their defense, businesses within reach of the now completed main fiber loop are already able to get service.

That said, we voted in support for bond issuance to fund construction, and the RFP wrapped up last month. Now I'm just hoping LPC picks a good contractor (not like an unnamed city in the northwest) so we can start seeing some real rollout this year.

Regulate the pipes. that turns them into a commons. The cost of the commons is borne by the system and the users jointly, for low (if any) profit. This is because its designated non-contestable, shared, and an enabler of competition (and profit) above.

Google pays would become Google funds and recovers the funds on utility rate interest. For reference, the utilities are typically a 50-60 year payback model, and very low rate of interest, but are gilt because the funder is typically government, and so not a loss risk. Its safe money. Google isn't government, but its probably the best safe money anyone has right now, because its motivated.

Really, the build to layer2 should be tax funded. but local and state government has been zombified by the corporate interests. AT&T doesn't want this to happen because they are happy monetizing their existing cable, and FIOS, which are exclusive tenancies, and allow them to rape both sides.

I'm still not understanding who is funding the initial common carrier built out. It looks like taxpayers are funding it, with the promise of free service via Google? Under that model, wouldn't it be double charging the taxpayers who paid to install the system if they opt for a service other than one provided by Google?

In his proposal, the taxpayers fund the rollout, and Google provides technical expertise (basically free of charge).

I'm not entirely sure you'd need to provide one fiber to Google - they might well be happy with branding and having users with better access to their services.

I live in Lawrence, Kansas, where Mr. Montgomery is asking the city commission to put up $500,000 to help pay for his gigabit network. Now he is threatening to take the network out of Lawrence if the city does not pay up.

Many of us feel we're getting scammed. The city has previously paid Mr. Montgomery and his company large sums of money to develop broadband access. The city is now, understandably, reticent to carry forward with another grant or loan. Although I'm sure Mr. Montgomery knows what he's talking about, many of us would like to see him and his company keep their promises to the city without asking for continued bailouts.

I wouldn’t propose that municipalities build these networks at taxpayer expense just to give them away, but they could certainly provide “common carriage” access to Google.

You'll have to forgive the silly question, I think my reading comprehension is a little off. In your proposed model, who, exactly, is paying for the networks to be built? [snip]

Although you quoted the entire sentence, your response is out of context. What Montgomery doesn't want is pay and give away. Clearly, the municipality is paying for construction. Google would get non-exclusive access in return for engineering, marketing, and legal services. All of those costs would also have to be paid by the municipality in the absence of an agreement like the one proposed.

Love this idea, but looking for a successful analogy. The usual "super highway" seems to be an ill fit.

Would the FAA/aviation system be the closest? Everyone shares the airways, which are managed by the FAA, but the actual "packets" zooming through and the airport terminals themselves are run/managed by private companies vying for your business?

If all the horror stories of american internet access i've seen are true - there shouldn't be a single person in the entire USA who doesn't wanna back this. Google may be evil world dominators but everybody knows they'd probably be one of the best ISP's in the world..

Love this idea, but looking for a successful analogy. The usual "super highway" seems to be an ill fit.

Would the FAA/aviation system be the closest? Everyone shares the airways, which are managed by the FAA, but the actual "packets" zooming through and the airport terminals themselves are run/managed by private companies vying for your business?

Ya. But the "airways" doesn't cost anything where as the fiber/copper cables costs a LOT.

Love this idea, but looking for a successful analogy. The usual "super highway" seems to be an ill fit.

Would the FAA/aviation system be the closest? Everyone shares the airways, which are managed by the FAA, but the actual "packets" zooming through and the airport terminals themselves are run/managed by private companies vying for your business?

Ya. But the "airways" doesn't cost anything where as the fiber/copper cables costs a LOT.

Love this idea, but looking for a successful analogy. The usual "super highway" seems to be an ill fit.

Would the FAA/aviation system be the closest? Everyone shares the airways, which are managed by the FAA, but the actual "packets" zooming through and the airport terminals themselves are run/managed by private companies vying for your business?

Ya. But the "airways" doesn't cost anything where as the fiber/copper cables costs a LOT.

Check the FAA budget recently?

Compared to building out a nationwide "shared" fiber optics system/buying out all the existing fiber optics/copper cable system? it's almost a drop in the bucket. (basically the only way this will work is if the government controls all the communication lines in the country and the "sells" access of it to providers...

Edit: FAA's unapproved budget for 2014 is 77 Billion. Google fiber's proposed nationwide buildout (which isn't that big... since it would cover most major cities and some suburbs and basically nothing rural) is 140 billion... and buying out all the rest of the copper/fiber? ya.... that'll happen real quick. Maybe if you put in a trillion dollars which has zero chance of passing the budget...

Love this idea, but looking for a successful analogy. The usual "super highway" seems to be an ill fit.

Would the FAA/aviation system be the closest? Everyone shares the airways, which are managed by the FAA, but the actual "packets" zooming through and the airport terminals themselves are run/managed by private companies vying for your business?

Ya. But the "airways" doesn't cost anything where as the fiber/copper cables costs a LOT.

Check the FAA budget recently?

Compared to building out a nationwide "shared" fiber optics system/buying out all the existing fiber optics/copper cable system? it's almost a drop in the bucket. (basically the only way this will work is if the government controls all the communication lines in the country and the "sells" access of it to providers...

Edit: FAA's unapproved budget for 2014 is 77 Billion. Google fiber's proposed nationwide buildout (which isn't that big... since it would cover most major cities and some suburbs and basically nothing rural) is 140 billion... and buying out all the rest of the copper/fiber? ya.... that'll happen real quick. Maybe if you put in a trillion dollars which has zero chance of passing the budget...

So... two years of the FAA budget will get the cities and suburbs.

There is no need to "buy out" any existing infrastructure. Why would you think so? And, if by "the government" you mean the Federal government, one hopes they keep their inept fingers out of this.

What about an approach in the style of electricity distribution, in which one (regulated) company maintains the infrastructure, and a number of retail providers compete on features and services? I keep thinking it's silly to have all these redundant data cables on the poles when we only have one set of electrical wires, and yet we only have one or two choices for data service and yet dozens of choices for electrical service.

Love this idea, but looking for a successful analogy. The usual "super highway" seems to be an ill fit.

Would the FAA/aviation system be the closest? Everyone shares the airways, which are managed by the FAA, but the actual "packets" zooming through and the airport terminals themselves are run/managed by private companies vying for your business?

Ya. But the "airways" doesn't cost anything where as the fiber/copper cables costs a LOT.

Check the FAA budget recently?

Compared to building out a nationwide "shared" fiber optics system/buying out all the existing fiber optics/copper cable system? it's almost a drop in the bucket. (basically the only way this will work is if the government controls all the communication lines in the country and the "sells" access of it to providers...

Edit: FAA's unapproved budget for 2014 is 77 Billion. Google fiber's proposed nationwide buildout (which isn't that big... since it would cover most major cities and some suburbs and basically nothing rural) is 140 billion... and buying out all the rest of the copper/fiber? ya.... that'll happen real quick. Maybe if you put in a trillion dollars which has zero chance of passing the budget...

So... two years of the FAA budget will get the cities and suburbs.

There is no need to "buy out" any existing infrastructure. Why would you think so? And, if by "the government" you mean the Federal government, one hopes they keep their inept fingers out of this.

And why wouldn't they need to buy it out? the build out infrastructure would still not be nearly anywhere enough to serve the population if they provided competitive pricing... And the policy would probably fail too since the rural areas would complain about not getting the same treatment and etc...

and you're also missing the point. the maintenance (and bureaucracy and etc) of the said network would cost WAY more than the current $77 billion budget of the FAA. Basically the government will have to be able to pull out $77 billion a year plus the costs of building out the network and buying out the current networks...

What about an approach in the style of electricity distribution, in which one (regulated) company maintains the infrastructure, and a number of retail providers compete on features and services? I keep thinking it's silly to have all these redundant data cables on the poles when we only have one set of electrical wires, and yet we only have one or two choices for data service and yet dozens of choices for electrical service.

What state are you in? The electric model you describe is what happens in Texas; are other states also doing this?

I live in Lawrence, Kansas, where Mr. Montgomery is asking the city commission to put up $500,000 to help pay for his gigabit network. Now he is threatening to take the network out of Lawrence if the city does not pay up.

Many of us feel we're getting scammed. The city has previously paid Mr. Montgomery and his company large sums of money to develop broadband access. The city is now, understandably, reticent to carry forward with another grant or loan. Although I'm sure Mr. Montgomery knows what he's talking about, many of us would like to see him and his company keep their promises to the city without asking for continued bailouts.

What about an approach in the style of electricity distribution, in which one (regulated) company maintains the infrastructure, and a number of retail providers compete on features and services? I keep thinking it's silly to have all these redundant data cables on the poles when we only have one set of electrical wires, and yet we only have one or two choices for data service and yet dozens of choices for electrical service.

What state are you in? The electric model you describe is what happens in Texas; are other states also doing this?

I'm in Texas.

What's particularly frustrating is how the data companies are moving in the opposite direction of what needs to happen. We're gonna have to come in and cut them apart again at some point, splitting off the infrastructure layer from the services layer. I fear the big ISPs have learned more from the breakups of ma bell and the big electric companies than the rest of us have… specifically, how to avoid getting broken up.

Regulate the pipes. that turns them into a commons. The cost of the commons is borne by the system and the users jointly, for low (if any) profit. This is because its designated non-contestable, shared, and an enabler of competition (and profit) above.

Google pays would become Google funds and recovers the funds on utility rate interest. For reference, the utilities are typically a 50-60 year payback model, and very low rate of interest, but are gilt because the funder is typically government, and so not a loss risk. Its safe money. Google isn't government, but its probably the best safe money anyone has right now, because its motivated.

Really, the build to layer2 should be tax funded. but local and state government has been zombified by the corporate interests. AT&T doesn't want this to happen because they are happy monetizing their existing cable, and FIOS, which are exclusive tenancies, and allow them to rape both sides.

You mean Layer 1, not layer 2. Because Layer 2 would include expensive hardware and ongoing support costs for that hardware. Not only that, but it also breaks offering other non-ethernet services over the fiber.

Love this idea, but looking for a successful analogy. The usual "super highway" seems to be an ill fit.

Would the FAA/aviation system be the closest? Everyone shares the airways, which are managed by the FAA, but the actual "packets" zooming through and the airport terminals themselves are run/managed by private companies vying for your business?

Ya. But the "airways" doesn't cost anything where as the fiber/copper cables costs a LOT.

Check the FAA budget recently?

Compared to building out a nationwide "shared" fiber optics system/buying out all the existing fiber optics/copper cable system? it's almost a drop in the bucket. (basically the only way this will work is if the government controls all the communication lines in the country and the "sells" access of it to providers...

Edit: FAA's unapproved budget for 2014 is 77 Billion. Google fiber's proposed nationwide buildout (which isn't that big... since it would cover most major cities and some suburbs and basically nothing rural) is 140 billion... and buying out all the rest of the copper/fiber? ya.... that'll happen real quick. Maybe if you put in a trillion dollars which has zero chance of passing the budget...

So... two years of the FAA budget will get the cities and suburbs.

There is no need to "buy out" any existing infrastructure. Why would you think so? And, if by "the government" you mean the Federal government, one hopes they keep their inept fingers out of this.

And why wouldn't they need to buy it out? the build out infrastructure would still not be nearly anywhere enough to serve the population if they provided competitive pricing... And the policy would probably fail too since the rural areas would complain about not getting the same treatment and etc...

and you're also missing the point. the maintenance (and bureaucracy and etc) of the said network would cost WAY more than the current $77 billion budget of the FAA. Basically the government will have to be able to pull out $77 billion a year plus the costs of building out the network and buying out the current networks...

You haven't answered the need to "buy out" the existing infrastructure. Do you feel the need to make Comcast, etc. whole? I don't.

Maintenance, etc. would be covered by current user fees. And I stand by my comment about "the government."

Anyway, you are missing the point. You told us, "Ya. But the "airways" doesn't cost anything..." when in fact, according to your own numbers, "the airways" cost us $77Bn/year. You can't have it both ways.

You haven't answered the need to "buy out" the existing infrastructure. Do you feel the need to make Comcast, etc. whole? I don't.

Maintenance, etc. would be covered by current user fees. And I stand by my comment about "the government."

Anyway, you are missing the point. You told us, "Ya. But the "airways" doesn't cost anything..." when in fact, according to your own numbers, "the airways" cost us $77Bn/year. You can't have it both ways.

So... without buying out the existing infrastructure, the lobbyists are going to have a field day on how tax payer money shouldn't be used to compete with private businesses... ya. that's exactly the point of the shit that the cable companies tried to pull in utah and other states...

and you're basically also saying that the government only needs to provide nationwide competition AND pony up the necessary upfront cost necessary to provide the competition with ZERO return for the first 5-10+ years that it would take to roll out all of the necessary infrastructure....

Have fun with your unrealistic plan. The only reason google fiber works right now is because it's funded as a private company and that isn't affilated with the government... even then, they're getting literally sued because of "preferential" treatment by the "government"

You haven't answered the need to "buy out" the existing infrastructure. Do you feel the need to make Comcast, etc. whole? I don't.

Maintenance, etc. would be covered by current user fees. And I stand by my comment about "the government."

Anyway, you are missing the point. You told us, "Ya. But the "airways" doesn't cost anything..." when in fact, according to your own numbers, "the airways" cost us $77Bn/year. You can't have it both ways.

So... without buying out the existing infrastructure, the lobbyists are going to have a field day on how tax payer money shouldn't be used to compete with private businesses... ya. that's exactly the point of the shit that the cable companies tried to pull in utah and other states...

and you're basically also saying that the government only needs to provide nationwide competition AND pony up the necessary upfront cost necessary to provide the competition with ZERO return for the first 5-10+ years that it would take to roll out all of the necessary infrastructure....

Have fun with your unrealistic plan. The only reason google fiber works right now is because it's funded as a private company and that isn't affilated with the government... even then, they're getting literally sued because of "preferential" treatment by the "government"

I live in Lawrence, Kansas, where Mr. Montgomery is asking the city commission to put up $500,000 to help pay for his gigabit network. Now he is threatening to take the network out of Lawrence if the city does not pay up.

Many of us feel we're getting scammed. The city has previously paid Mr. Montgomery and his company large sums of money to develop broadband access. The city is now, understandably, reticent to carry forward with another grant or loan. Although I'm sure Mr. Montgomery knows what he's talking about, many of us would like to see him and his company keep their promises to the city without asking for continued bailouts.

You need to learn how to tell the difference between credible and articles that are not credible. The article provides no evidence to these "plans" the articles does not even quote Mr. Montgomery.

The article you linked to is not credible for those reasons which means YOU ARE NOT CREDIBLE

Be dirt cheap to run fiber to the block and 802.11ac wifi from there. Use dirt cheap mesh repeaters in street facing windows to redistribute the signal up and down the street and into the home.

Well, with fiber to the home, everyone gets their own gigabit connection. With 802.11ac, everyone shares the same gigabit connection, which is pretty much the system most of us are stuck with on cable.

If each home across America gets gigabit connectivity, what about upstream connections? Wouldn't you need to upgrade the connections between ISPs and core networks so they don't get swamped? There's a huge difference between a million people watching YouTube at 10 Mbps vs. at 1 Gbps.

I'm wondering if we can look at South Korea and Japan as examples of widespread high speed wired/wireless connectivity.

I live in Lawrence, Kansas, where Mr. Montgomery is asking the city commission to put up $500,000 to help pay for his gigabit network. Now he is threatening to take the network out of Lawrence if the city does not pay up.

Many of us feel we're getting scammed. The city has previously paid Mr. Montgomery and his company large sums of money to develop broadband access. The city is now, understandably, reticent to carry forward with another grant or loan. Although I'm sure Mr. Montgomery knows what he's talking about, many of us would like to see him and his company keep their promises to the city without asking for continued bailouts.

You need to learn how to tell the difference between credible and articles that are not credible. The article provides no evidence to these "plans" the articles does not even quote Mr. Montgomery.

The article you linked to is not credible for those reasons which means YOU ARE NOT CREDIBLE

You know, I had to downvote you here, because you seemed to have missed the part where Joshua Montgomery is listed as the author of the article. Perhaps before attacking someone you should actually perform even basic checking.

Also a quick browse through the link seems to show a some amount of controversy around Mr. Montgomery and his company, in line with what was suggested.

Love this idea, but looking for a successful analogy. The usual "super highway" seems to be an ill fit.

Would the FAA/aviation system be the closest? Everyone shares the airways, which are managed by the FAA, but the actual "packets" zooming through and the airport terminals themselves are run/managed by private companies vying for your business?

Ya. But the "airways" doesn't cost anything where as the fiber/copper cables costs a LOT.

Ya. But the "airways" doesn't cost anything where as the fiber/copper cables costs a LOT.

Correction: digging the trenches costs a lot.

Everything else is pretty cheap, easy to cover using monthly service fees. The problem is digging the trenches.

It doesn't match airways at all, because airways cost nothing up front and are expensive to run during operation (keep planes from crashing into each other/buildings for example). A far better analogy is railway lines. It costs a lot to put a new railway line into place, but once there the ongoing maintenance is easily affordable (so long as a reasonable amount of trains actually use the line).

I live in Lawrence, Kansas, where Mr. Montgomery is asking the city commission to put up $500,000 to help pay for his gigabit network. Now he is threatening to take the network out of Lawrence if the city does not pay up.

Many of us feel we're getting scammed. The city has previously paid Mr. Montgomery and his company large sums of money to develop broadband access. The city is now, understandably, reticent to carry forward with another grant or loan. Although I'm sure Mr. Montgomery knows what he's talking about, many of us would like to see him and his company keep their promises to the city without asking for continued bailouts.

"Joshua Montgomery, owner of Wicked Broadband has been so kind as to provide all Habitat Homeowners free wireless Internet service. I cannot express to you the thoughtfulness of his generosity." - Cathy Brittain, Lawrence, KS

"Joshua Montgomery and his Internet service have been generous supporters of our services since 2011. This support came at a critical time for our agency when funding priorities for both the University of Kansas Student Senate and United Way of Douglas County were changing.

Ya. But the "airways" doesn't cost anything where as the fiber/copper cables costs a LOT.

Correction: digging the trenches costs a lot.

Everything else is pretty cheap, easy to cover using monthly service fees. The problem is digging the trenches.

It doesn't match airways at all, because airways cost nothing up front and are expensive to run during operation (keep planes from crashing into each other/buildings for example). A far better analogy is railway lines. It costs a lot to put a new railway line into place, but once there the ongoing maintenance is easily affordable (so long as a reasonable amount of trains actually use the line).

Not just the digging but the disruption. I remember when one city was going from east to west for about a year. The disruption to traffic and businesses were something else.

I live in Lawrence, Kansas, where Mr. Montgomery is asking the city commission to put up $500,000 to help pay for his gigabit network. Now he is threatening to take the network out of Lawrence if the city does not pay up.

Many of us feel we're getting scammed. The city has previously paid Mr. Montgomery and his company large sums of money to develop broadband access. The city is now, understandably, reticent to carry forward with another grant or loan. Although I'm sure Mr. Montgomery knows what he's talking about, many of us would like to see him and his company keep their promises to the city without asking for continued bailouts.

Sorry about this guy. I took over a local forum "larryville.com" in 2008 and have been haunted by trolls ever since. He is full of it. Please don't feed the trolls.

Anyway, to clarify: We've never rec'd funds of any kind from the City, but we do have an economic development request on the table. Under our proposed structure, the City will match us dollar for dollar up to the first $500K of the project, after which we will be responsible for fund raising. A presentation of our proposal can be found here: http://prezi.com/xf6jmbmpiv9f

What the City gets in exchange for their participation is a contractual requirement to operate the network as a common carrier and continued free access for non-profits, government entities, etc.

The City's response to our offer has been to issue an RFI to see if anyone else has any interest in building a network. That gave us the idea to issue our own RFI to see if any cities might be more willing partners. So far we've had three responses. ( http://wickedfiber.com/fiberrfi/ ). Frankly, in light of very reluctant participation from the City of Lawrence over the past 8 years, we are evaluating other options.

We've been operating since 2005 and are profitable. We don't require any further cash infusions, but we do want to expand into FTTP, because that is clearly where the future is. As Google pointed out last week:

"The private sector alone cannot enable the United States to take full advantage of the opportunities that advanced communications networks can create in virtually every area of life. As a result, federal and state efforts are taking place across the Nation, including Kansas, to deploy both private and public broadband infrastructure to stimulate and support economic development and job creation, especially in economically distressed areas." - http://www.kansansforbroadbandaccess.com/google.php

Thanks for all of the positive input from everyone. I hope that this Op-Ed sparks a discussion about how we can build effective public/private partnerships to expand Internet access here in the U.S.

In Lawrence we have offered to split the funding of the pilot project with the city 50/50 (around 1,200 addresses passed) and pay for further expansion by going out for a round of equity financing.

Changes to SEC regs related to investor accreditation, promotion of offerings and crowd funding will make it much easier to raise funds in 2015 than it was in 2006. It doesn't hurt that we are profitable and have the best customer service in the market ( or possibly the state - http://goo.gl/8OFoJr )

Networks should be operated as common carriage on principle, but also as a financial necessity if you are building with limited resources in a market with an incumbent cable and/or phone providers.

A common carriage network with several retail providers will have a higher take rate than a network without common carriage.

The dirty little secret of the ISP business is that the incremental costs of serving each subscriber are almost $0. Your fixed costs, however, are fixed.

With this in mind, the goal of any successful ISP is market share. You need enough subscribers to pay your fixed costs. Everything else is gravy. Common carriage is one way to achieve the market penetration necessary to pay your fixed costs. It doesn't matter if you are getting paid a wholesale rate ($25/Mo) or are providing a premium data product ($99/Mo), your goal as an ISP is to get paid for as many drops as possible.

Since a common carriage network will have multiple sales teams working to sell each address common carriage networks will have a higher take rate than operator owned networks. Ultimately it doesn't matter who wins the customer, the owner of the fiber gets paid some portion of the monthly bill and uses those funds to maintain the infrastructure and meet the financial obligations incurred during construction.

Common carriage is common sense really, but folks who run ISPs aren't usually forward thinking. Most of them don't have any real competition and are so scared of having their golden goose plucked that they would rather resort to anti-comparative legislation than innovate and compete.